Rule no. 1 for junior bankers: Never start as an associate when you can start as an analyst

2014 has been a good year for junior bankers. Abundant work and tight 'talent' have conspired to leave juniors in a strong bargaining position. They've had their salaries hiked, they've been granted mandatory weekends off, and they're being given opportunities to start their careers several rungs up the ladder. But while salary hikes and weekends at home might be a good thing, recruiters warn that banking careers that don't begin at the bottom are more likely to end before the top.

"We've started to see firms bringing in newly-qualified accountants as first year associates rather than as second or third year analysts," says Andy Pringle, director at recruitment firm Circle Square Consulting. "If you're a candidate this can be a dangerous move to make - it usually happens at the top of the market and next time there's a crash, those people who came in as associates will find themselves unwanted."

Analysts are at the bottom of the investment banking pile. Recruited straight out of university, they spend three years crunching numbers, building financial models and assembling PowerPoint presentations before being promoted to associate. Associates do some number crunching and PowerPoint assembly, but their real role is to manage the analysts. Associates who haven't been analysts themselves are at a disadvantage.

"If you haven't done at least the third year of an analyst program, you won't have strong modelling skills," says Pringle. "And if you don't have the modelling skills, you're going to be less well-rounded and less useful." While this isn't a problem in busy markets, Pringle says poor modelling skills are a red flag when headcount is being cut: "Banks will keep the people who have come up through the ranks and who can do the jobs of analysts, associates and VPs equally well."

Recruiters say MBA students who skip the analyst program and join banks as associates are vulnerable for the same reason. "[efc_twitter text="Time and time again, we see that the people hired in as MBAs are the first to be let go"]," says the head of one investment banking search firm, speaking on condition of anonymity. "Banks need people who can run numbers and do the valuations. MBAs touch on that in their training, but they're not nearly as good as an analyst who's spent three years building models day in, day out."

Heather Katsonga-Woodward, a former Goldman Sachs M&A analyst who’s also turned her hand to helping people get into the industry, agrees that MBA's modelling skills are often weak: “The associates are supposed to help you with some of the modelling that’s required to put the presentations together, but when they’ve just done an MBA they can lack confidence and be over-reliant on you," she told us last summer.

If you want your M&A or IBD (investment banking division) career to last longer than than the current strong market, therefore, don't cut corners. Do complete the analyst years and do resist banks' attempts to seduce you with a generous job title. They're only doing it out of panic. "[efc_twitter text="The carcasses of most second and third tier banks have already been well picked over for junior staff"]," says the headhunter. "If a bank is offering to make you an associate and you don't have modelling experience, it's because they're desperate. But that can change."